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Occupy Wall Street: Weak on Student Loan Debt?
While the Occupy Wall Street movement gathers force and national recognition, how solid is their student debt argument?
Art Carden at the Christian Science Monitor believes that the Occupy Wall Street movement is complex and raises many legitimate issues — but that student loan debt is not one of them.
As Carden wrote in an article at Forbes, mere contempt for “Wall Street Greed” is ineffective and unhelpful. He recommends this Chronicle of Higher Education piece on anarchism and its influence on the Occupy Wall Street protests.
“It explores some of the complexities of a movement that’s obviously much more than spoiled rich kids upset that they don’t have the cash to upgrade to the new iPhone but obviously much less than a thoughtful criticism of systematic distortions in the banking system.”
However, one of the comments on the Chronicle’s article grabbed Carden’s attention. The author complains that her dreams as “an academic, poet, and scholar” are hampered by the student debt she incurred in graduate school.
Carden believes that student loan debt is the issue on which it is hardest to take the Occupiers seriously, “and no doubt this is why the critics have seized on loan complaints as a reason to dismiss the movement as (again) a group temper-tantrum by spoiled kids who don’t realize how good they have it”.
There are many college degrees that are great fun and very fulfilling, however they don’t represent any real investment in human capital. Carden compares them to consumption goods. And in this economy financing consumption with borrowed money isn’t a very good idea.
Carden believes that a great irony is that a lot of the current mess is due to a policy regime that encouraged financial institutions to put “people before profits” with an array of carrots – such as a liquid market for what would become Troubled Assets and backed by an implicit government guarantee – and sticks – like the HUD pressure to pursue political goals.
Suppose the banks had said “no, we can’t do this because these are unsustainable and unwise policies that will create serious problems down the road.”
Carden’s guess is that Wall Street would have been occupied by many of the same people carrying “People Before Profits” signs.
Nobel Laureate Joseph Stiglitz makes a salient point about current institutions on which economists from across the ideological and intellectual spectrum can agree:
“There’s a system where we’ve socialized losses and privatized gains. That’s not capitalism; that’s not a market economy. That’s a distorted economy.”
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